GSK cancels plans to close Stiefel plant in Ireland

GlaxoSmithKline ($GSK) has changed its mind about the fate of its pharmaceuticals plant in Sligo, Ireland. The London-based drug giant, which had planned to shutter the facility next year, announced that the site would stay open with a core staff of 120 employees and shift its focus from manufacturing pharmaceuticals to consumer products for its Stiefel business.

With the support of IDA Ireland, GSK is expected to pump €10 million ($13 million) into technical upgrades and other improvements over the next 5 years. This and the decision to keep the operation alive stand in stark contrast to the plans GSK announced in 2009 to shut the doors at the plant, which it acquired in its buyout of Stiefel Laboratories that same year.

Why the change of heart? Part of the credit goes to GSK's industrious crew at the facility. Pat McLoughlin, GSK's site director in Sligo, stated that productivity has increased 40% at the facility in the past three years, adding that that was "a key factor in the decision to choose Sligo for future development." According to IDA Ireland's release, GSK has slotted the Sligo plant as a key supplier for Stiefel consumer products and the base of its liquid bottling operation. It's also slated for development of the company's consumer products, such as Physiogel, Oilatum, Stieprox and Driclor.

Still, the transition from pharmaceuticals to consumer skin care products won't come without job casualties. GSK plans to cut 60 of 180 positions at the Sligo facility over the next two years as part of the switch to consumer products--meaning 120 jobs are safe and GSK will have axed more than half of the 250 jobs at the facility since it announced plans to shutter the operation in 2009. The good news: After the additional cutbacks, GSK plans to add 50 positions in Sligo in 2014 to support expansion.

Shaken from economic calamities in recent years, Ireland's government has aggressively worked with industry to preserve and create jobs in the country, and it's had some help from pharma groups. Eli Lilly ($LLY) is investing €330 million in an expansion in Kinsale that features a 240,000-square-foot commercial and manufacturing plant. And last year Sanofi ($SNY) revealed plans for a $207 million plant expansion in nearby Waterford for its Genzyme unit.

- here's IDA Ireland's release
- see the Irish Times' article